280. On the approved lists there might be concerns
from the small training providers that they do not know the people
involved in the LSCs and TECs"they all seem to be
the same peopledifferent meetings, same faces; we are not
part of that outfit within the local community and we are going
to be squeezed out; whereas the existing system at least provides
a level playing-field for us". We have seen quite a large
growth in the number of new providers coming on-stream, and then
the learner has far more choice rather than there being just a
local institution such as yourselves.
(Mr Hall) Can I come back on that because I think
the area of quality assurance falls rather more within my remit
and at a high level of policy. The direction that states that
all providers should satisfy these threshold requirements is built
in to the remit of the Learning and Skills Council. You say that
lots of new providers have been brought in, but how do we know
whether those providers are any good?

Chairman

281. Because the consumer has had training and
enjoyed the training, and the scheme got through to people that
were not previously reached.
(Mr Hall) I am not sure that the statistics back up
all of those assertions, Chairman.

Mr Shaw

282. We do not know at this moment, do we? We
have not got any way of testing that, so the Chairman might be
right or you might be right. That is the problem.
(Mr Hall) Absolutely, and if I am doling out public
funds, I think I need to know.

283. What about the range of courses on offer
in terms of the discount; if we are seeking to bring in more potential
learners from groups that otherwise have not had any qualifications,
do you think the answer is to widen the availability of the type
of courses on offer? Again, that might squeeze out some of these
poor trainers. Is IT training easy? Is it rich pickings?
(Mr Hall) In having five or six questions, I will
keep to the ones I can answer! In very broad policy terms, which
I think this Committee will be interested in, we are at a very
interesting moment of time. Parliament has removed Schedule 2.
That was a very useful template for what we could and could not
fund as far as the Further Education Funding Council was concerned,
and therefore there are certain types of provision such as Feng
Shui and so on, which did not fall within Schedule 2 and we would
not fund. It is a big challenge for the Learning and Skills Council
to decide how it will fund provision that previously was not incorporated
in Schedule 2. What priority should it give to that? While there
are strong arguments to say that kind of provision is a good first
rung back into learning, on the other hand we also have a corporate
plan to deliver targets for improving participation 16-19, for
raising attainment levels at levels 2 and 3 for young people and
adults, and there is a big policy issue about how much of your
limited funding you devote to that kind of provision. It is a
similar issue with workforce development. Perhaps I should bring
Michael in now because that is the territory where we think it
should be expanded.

Chairman

284. It would be useful to hear from Mr Stark
at some time.
(Mr Stark) It would be useful to bring together the
issues that are funded through ILAs, and those which are funded
through all the other provision for further education. We have
a budget of about £2 billion, which goes to supporting further
education for adults. That travels either through colleges or
through other training providers. Part of what it funds is precisely
the sort of activity that we are also promoting through ILAs.
I draw attention to the "Bite-Size" programme that ran
last year, which was extremely successful. It will run again this
year. We put about £4 million into that, and that will bring
in 70,000 learners at about £55 per head. That is a very
cost-effective way of drawing on the infrastructure which you,
the tax-payers, are already funding through the system; and it
carries with it all of the quality assurance and all of the inspection
regime, and it also offers the opportunity to draw in new providers
because they can work with colleges and deliver things in local
settings, which can be extremely effective. I think that we should
regard this as a totality, not as a separate little programme
that grew into a very large one, but as a community with interests
between the providers, the learners and their employers. That
is where we will take the direction of the Learning and Skills
Council planning and strategy.

Chairman

285. Was not the whole point of ILAs in their
original design to empower the individual, and in a sense to keep
them separate from your bureaucracy? I do not use that in a negative
way, but a very simple system that empowers the individual to
go out and choose the kind of learning that they want to get and
to trust the consumer? It seems to me that as soon as we start
saying that everything has to be quality assurance, we are in
danger, if we do ILA mark 2, of losing the effervescence, what
was good about the ILA. In a sense, what is worrying me about
Geoff Hall's view is that he seems to want to get his quality
assurance on it, and perhaps he and your organisation will kill
the fun out of the scheme, the fizz.
(Mr Hall) I hope not. There are two types of quality
assurance, are there not? There is whether the providers themselves
are up to snuff, whether they can deliver genuine training, rather
than handing out a videotape and a book and making a quick killing.
The second aspect of quality assurance is whether they are delivering
qualifications. Again, Parliament has legislated and said that
there should be a rigorous framework in qualifications, and that
Section 97 approval is required.

286. Not for ILAs.
(Mr Hall) But how are you so sure that the consumer
knows what product they are getting?

287. ILAs were not intended merely to deliver
qualifications; they were to get people back in to the learning
process.
(Mr Hall) There is Michael's "Bite-Size",
which we fully support, but you were saying that ILA's led to
qualifications. I do not think that that is necessarily the case.
We do not know that that is happening. We do not know how many
have progressed into qualifications, do we?

288. Does it matter?
(Mr Hall) Well, I think it matters in as much as my
Council has adopted a corporate plan that has clear targets devoted
to the achievement of qualifications, and I think they are the
Government's and Ministers' priorities as well.

289. John Healey, the Minister, came before
this Committee and what he seemed passionately to believe in is
that attracting people back in to learning might start the process
to the qualification, but in a sense what I am seeing is a real
difference between the LSC kind of philosophy and the original
concept philosophy of ILA schemes. What we are worried about in
this Committee is that if you, as the LSC, take it over, you might
drive out the very essential ingredient that was so stimulating.
(Mr Hall) One of the difficulties about the ILA scheme
is being quite sure which of the number of objectives that it
carried were predominant. I was involved in the policy discussions
in 1997 to 2000 and one of the key things about ILAs was the account,
as one of the previous witnesses emphasised. The idea was to try
and lodge in our culture the same attitude towards a learning
account as most of us would have towards a pension and mortgage.
It was specifically not targeted at those most disadvantaged.
The argument was that fee remission schemes and other projects,
including European-funded schemes, were the best way to bring
them back into learning. You asked some of these questions yourself,
Chairman, to earlier witnesses: was this not in essence a middle-class
scheme because the middle class taking to this, changing the culture,
would pull through the rest? Michael outlined to you the scheme
for working with companies. We have heard how excellent the trade
union schemes were, and there is great excitement in small and
medium enterprises about company learning account schemes. There
is tremendous effervescence around those sorts of schemes that
can be embedded and sustained over a period of time, to deliver
high-quality learning. That seems to me to be a very worthy set
of objectives.

Chairman

290. I hear what you say, but what I am trying
to get out of you, as a witness, is what you think about the ILAs.
I am getting a very distinct feeling. We have had a lot of witnesses
here who have said, "there were a lot of problems with it,
but it was a really good scheme". We have heard that said
this morning. What I am getting from you is that you did not like
the scheme; you thought there were some fundamental problems with
it. I get the very strong feeling that you have a very negative
view of the ILA both in its conception and the way it turned out.
(Mr Hall) No, I think that is absolutely untrue. We
were enthusiasts for it; we ran two precursor schemes that we
passed the evaluations to you onthe Pathfinder Scheme and
the Fee Discount Scheme. As Michael will tell you, some of the
very exciting ideas that we think we have for how an ILA mark
2 can be embedded, linked in to other initiatives, can make it
very successful. I think certainly from some of the experiences
we had in the further education sector, particularly with the
demand-led element, which the Principal of Preston College alluded
to and Mr Chaytor asked questions of earlier witnesses on, did
make us cautious and circumspect about some aspects of the way
this particular scheme was implemented, but just as with franchising,
although there were many unfortunate episodes, we brought in 700,000
learners. If the scheme had continued, if the demand-led element
had not been withdrawn, it would have gone over a million. Many
of those were new learners. There is a difference between being
excited by a concept and wanting to see it work over a long period
of timeif ILAs are to work, they are such a big idea that
they have to work over ten or twenty years, have they not? They
have got to work so that you open them for your grandchildren
to pay for fees in 2020; they cannot just be a small-scale initiative.

Chairman: I think the Committee would agree
with you on that.

Mr Baron

292. Is there a compromise here, in the sense
that what we do not want to do, as the Chairman said, is to take
the fizz out of ILAs? We want to make them universally available
and we want that popularity to be there, but at the same time
a number of individuals have come before the Committee who have
expressed concern about the quality assurance and quality control.
Some providers have commented about the courses they are offering,
and that has led us into all kinds of avenues for fraud. Is there
a compromise involving the LSCs more with regard to regulating
the providers rather than looking at the other end of the spectrum
and the nature of the courses, in other words making sure the
providers are kosher and producing the courses and making sure
that there is an element of local input to ensure quality control,
and leave it there? In that way, your bureaucracy does not suffocate
the whole initiative and drive behind the ILAs.
(Mr Hall) In the long term we do think that for adult
provision this offers a very promising way forward, so I agree
with what you say about the minimum control necessary to safeguard
public money.
(Mr Stark) Chairman, it partly depends on the universality
of the offering and the degree of subsidy. Those two things are
not connected. You can have a universal offer but you do not have
to have a universal subsidy. If there is a very high element of
subsidy, you need a larger measure of quality control and a certain
degree of bureaucracy that will go with that. Our vision is that
everybody should have a Learning Account but not that money should
be pumped into it by the public purse. My brother has an ILA.
He does not need it, frankly. To have the £150 that goes
with that is not important to him. He would have taken out the
account anyway if he had had a sense that it was a dynamic process,
something which fitted in with his wider affairs, something that
he could hand on to his children or which his employer could contribute
to. It is a different thing to talk about the subsidy and to talk
about the mechanism.

293. Universality is the key thing with regard
to availability, but you are saying that that is one thing, as
we all agree, and on the other hand funding does not have to be
universal. You can target funding. Do you think you would have
a role to play in that, going forward? One of the things we are
trying to get at here is that there is a lack of control, which
is why we have hit the buffers. There are accusations about fraud
and various other concerns, including lack of control generally.
How do you put a structure on to this without killing the fizz?
(Mr Stark) The Learning and Skills Council already
does have a significant role in targeting funding. That is how
our funding mechanisms are directed. They are prejudiced in favour
of particular providers, particular learners. They are intended
to support progression. They heavily favour those at the bottom
end of the learning scale. Basic skills provision is entirely
free. Opportunities like "Bite-Size" courses are provided
free at the point of delivery. This is the business that we are
in as an organisation. It would be foolish to take us completely
outside it, but equally I take the point that in doing something
different here, with a bit of a fizz to it, it does not have to
be strangled by existing regulations. There is a process that
we could go through over time that would end up with a better
result for everybody. Just to go on, there is something here about
the collectivity of people, rather than their individuality, that
is worth addressing. If we look at some of those experiments run
under the TECs: the Birmingham Learning Exchange is an example
of the effect of pooling eight or twelve learning accounts of
£150. There were the Shirley Street Traders, an example of
people who ran their own course. Another group of people ran a
childcare course. That would not have been possible with individual
amounts of £150, but was possible collectively. That is a
point we have missed in ILA Mark 1. By going down that separate
route, from Capita to the individual, and then a provider somewhere
along the way, you lose that ability to bring things together
for a group.

294. In trying to learn lessons for the future
for ILA mark 2 what are the key lessons from your point of view?
(Mr Hall) I think you have specified most of them.
We think that you must have sufficient control to have public
confidence when money has been put out. We think it has got to
be sustainable from the outset, so if you have a very successful
scheme, as somebody remarked this morning, you cannot have an
uncapped budget because you will run into the same difficulties.
You have to take that broader view. Some of the things Michael
has talked about, particularly if they can be linked in with other
initiatives that are about, for example the small company learning
accounts, are very promising indeed. The trade union learning
accounts work very well. Building on the successesobviously,
because a crisis has been reached, it is harder to make the measured
evaluation that you would expect in these circumstances. I think
we probably have to accept local variation too. I wonder whether
it is possible to design a one-size, fits-all national scheme.
We still have one or two. The TEC projects were particularly successful,
including working with banks. It was very difficult for the Department
to persuade the banks nationally to take on the scheme. Perhaps
the risk was too great, but I think that is worth re-visiting.
Another of our ideas that we have mentioned, which I think is
particularly exciting, is the concept of learning miles. We have
seen how successful air miles have been over time. People did
not expect that to last. You can top up your account or trade
it in, and that is another avenue that we could explore.

Valerie Davey

295. We are quite encouraged by some of the
things you have said, and I certainly think the tenor of the evidence
we have had gives you a role as the gate-keeper, in terms of mentoring
providers. You have mentioned some good local initiatives. Who
will monitor those national providers? How will that fit in?
(Mr Hall) One of the things we are required to establish,
because it was seen as such an obvious gap, is a national contracting
service. We have done that, and that is beginning to operate and
is re-kindling interest in some of our leading companies that
perhaps have not been engaged in work-based learning in recent
years. That would be the obvious unit to look after national providers.

296. We have now got the other national body,
the Capita ILA Forum. How has that worked, in your experience?
I know that you get direct funding. Have they been efficient?
(Mr Hall) We do not deal directly with Capita. Once
they took over as a service provider, they dealt with colleges.
Because of the success of the scheme in autumn 2000, a situation
arose where, if you had not pre-registered and you turned up at
college to enrol, you could not access the scheme. That was a
bit inflexible and ministers persuaded Capita to be more flexible
about that. I have missed a really important part of the answer
I should have given on how we see some of these schemes working,
and that is the Sector Skills Councils. The work on sector skills
pilots are using the ILA type of approach.
(Mr Stark) Absolutely. In most of the work that we
are doing, we are focusing not just on business as a general proposition,
or employees as a category, but on people's relationship within
a sector, because then you can get various supply chain pressures
for improved performance, for raising training standards, and
at this point you would usually come across a funding difficulty.
A small sum of £100 or £150 might stand in the way of
the lifelong learning which would update somebody in the care
field, or in a gas occupation. If we could use ILAs on a sectoral
basis within groups of companies, we could probably advance both
our employability and our individual lifelong learning ambitions
quite successfully.

297. Mr Stark, are you saying you really have
no link with Capita as the LSC?
(Mr Stark) Individually, I have not ever needed to
phone Capita about any case. The point I would make about Capita
is a rather broader one. The nature of their role is a back room
exercise, essentially forming a liaison between an individual
and a training provider. This cuts out the aspect of ILAs which
I think is so powerful, which is the opportunity to get contributions
from different parties. The Capita contract does not allow of
contributions from an employer, from a granny, from anybody else.
So it does not build in the sense that we all, I think, had at
the beginning of this, an Individual Learning Account, because
it is not really an account, it is a mechanism.

298. So it is a robotic body, and by other accounts
not particularly efficient and certainly not looking at the quality
control or the
(Mr Stark) That is not what their contract asks them
to do. I am not blaming them for that at all because it was not
their role.
(Mr Hall) I think there may have been a link group
of providers, and the FEFC might have acted in that role, and
so there was some contact through a liaison group.

Paul Holmes

299. Mr Stark you have talked about the "Bite-Size"
programme, which was successful and cost-effective. We heard earlier
from other witnesses that the ILA scheme was so loosely organised
by contrast to that, for example, that it was just a licence to
print money£265 million and still rising. Would you
agree with that assessment?
(Mr Stark) I would prefer to comment on the bits I
do know about. I do not know where the bad bits of the ILAs are,
and by definition the LSC has not been involved in that.